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Pyramid Scheme MMM Kenya Collapses as Founder Mavrodi Dies

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MMM Kenya

MMM Kenya, a local affiliate of MMM Global, is in a limbo after the death of its founder Sergey Mavrodi. Mavrodi, who had been operating the dubious money doubling scheme online, reportedly passed away after a heart attack last Sunday, leaving thousands of his victims with worthless “mavros” and hundreds of millions of shillings lost.

Although the MMM pyramid scheme had already crumbled in countries such as Nigeria and South Africa, MMM Kenya continued its operations enticing thousands of people to pay money to strangers they interacted with online.

The Man: Sergey Mavrodi

Mavrodi was a renowned Russian fraudster who was found guilty in 2007 of swindling money from 10,000 Russian investors who lost more than $4 million and was sentenced to 4.5 years in prison. After his release in 2011, the MMM Ponzi scheme resurfaced only that now Mavrodi’s target market became the African continent. In 2015, MMM South Africa was established, promising participants a 30 percent return on their investment and bitcoin became the payment option of choice for the scheme.

The Ponzi scheme would later in 2016 spread to other African countries such as Kenya, Ghana, Nigeria and Zimbabwe.

Media reports say that the 62-year old died of a heart attack after a short complaint of chest pain and weakness. Moskovsky Komsomolets, a Moscow newspaper reported that “Mavrodi was hospitalised in the 67th City Hospital. He could not be saved – he died this morning.”

According to a statement on their website, MMM Kenya administrators said “they have put the Internet-based infrastructure on “pause” mode, leaving all those in possession of “mavros” – the pseudo-currency sold by Mavrodi – unable to do anything with it. As such, those with money in the pyramid scheme will be unable to withdraw anything. The statement went on to say: “In the near future, the administration will take a decision concerning MMM’s future and report on it officially.”

MMM Kenya Membership

The common question that was asked of any new recruit interested in the pyramid scheme was: “How much money do you need to be absolutely happy?” MMM Kenya has recruiting agents who would then entice the new members into meetings and ask them to sign up so as to get financial assistance from other new members. The new recruits would then be asked to donate money to the “needy” – the older members – and, in turn, they would earn points in MMM’s (fictitious) digital currency. In the scheme, the more a person gave or the more an old member convinced new members to join, the more points – known as mavros – they earned which they could end up withdrawing as money.

According to the Daily Nation, those investing in the Ponzi scheme were also promised a 30 percent return on their investment and higher returns if they helped members within the scheme that needed financial aid. And the only way that MMM Kenya would survive is if more members signed up. If there is an imbalance between the number of new recruits and those seeking financial aid, the scheme would collapse. This was the case in Nigeria when the number of those seeking help surpassed that of those donating.

CBK Warning

The indefinite “pause” of the MMM Kenya operations comes two months after Patrick Njoroge, the Central Bank of Kenya Governor issued a warning to those investing in digital currencies like bitcoin and Mavrodi’s Mavros that it was a bubble and they should be ready to lose all their money.

The CBK notwithstanding, the operations of MMM in Kenya continued with thousands falling victim to the scheme with a promise of getting high returns on their investment. As Kenyans who have invested in the pyramid scheme await for a way forward from the company, it is only a matter of time before they can start counting their losses.

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Binance Launches Fiat-to-Crypto Exchange in Uganda

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Binance Launches in Uganda

Global bitcoin exchange Binance has launched a new fiat-cryptocurrency exchange in Uganda. The exchange will also be offering a reward of 0.5 BNB to the first 20,000 users that register on the site as part of its promotion in Uganda.

The announcement comes nearly two months after Binance partnered with Crypto Savannah, Made in Africa initiative, and Msingi East Africa to promote economic development in the East African country.

Changpeng Zhao and Yi He founded Binance in 2017 and raised $15 million through an initial coin offering for its ERC20 token BNB in July of the same year.

The exchange plans to move its offices to the island nation of Malta after the implementation of stricter regulations in China and Japan. In January 2018, Binance was the largest crypto exchange with a market capitalisation of $1.3 billion.

Binance in Uganda

BinanceBinance will also offer its Ugandan users a month of zero trading fees when trading goes online. The exchange will announce the opening for trading at a later date.

Users can find out if they have won any rewards by logging into their accounts and accessing ‘Distribution History’ in the Account Center. In addition, users will be required to complete ID verification to be able to withdraw funds from Binance.

Ugandan users will enjoy an exchange that offers fast transactions of up to 1.4 million per second and state-of-the-art storage technology for utmost security. The exchange also provides 24/7 customer support and has a user-friendly interface.

The presence of Binance in Uganda aims to boost financial inclusion in the country, which has increased from 28 percent in 2009 to 54 percent in 2013 according to its national financial inclusion strategy 2017-2022.

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LINE Corp to Launch Cryptocurrency Exchange BITBOX in July for Global Trading

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BitBox
Image by linecorp.com

The developers of popular messaging app LINE and LINE Group’s cryptocurrency and blockchain company LVC Corporation have announced that they are set to launch a new cryptocurrency exchange called BITBOX in July 2018. The Japan-based firm made the announcement during the LINE Conference 2018 held in Tokyo.

The New BITBOX Exchange

BITBOXBITBOX will offer over 30 high-demand cryptocurrencies to users globally with the exception of Japan and the US. The exchange will trade coins such as bitcoin, ether, litecoin, and bitcoin cash while charging low trading fees of 0.1 percent. BITBOX will support 15 languages, according to the company press release.

The selected cryptocurrencies for the exchange have undergone an extensive screening exercise and have been picked by an internal committee, promising users a convenient and safe trading experience. LINE will also incorporate its top security standards to the cryptocurrency exchange.

LINE Corporation CEO Takeshi Idezawa said:

“As a key part of LINE’s new financial services, BITBOX shows our commitment to fulfilling the growing demand for more diverse financial options. With BITBOX, LINE users will be able to access cryptocurrencies more easily, while also being assured of state-of-art security measures to protect their assets.”

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Nigerians Have Invested Over $5m in Cryptocurrencies Despite Regulator Warnings Says KureCoin Hub

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Nigerians Invest in Cryptocurrencies

Nigerians have invested over five million US dollars in the cryptocurrency market in the last couple of years according to data from Nigerian cryptocurrency platform KureCoin Hub.

The data shows that Nigerian retail investors are investing heavily in the cryptocurrency market despite warnings from the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) against investing in an unregulated market.

KureCoin Hub’s co-founder and CEO Tega Abikure has criticised the stance regulators have taken and argues that the country will lag behind as other countries enjoy the benefits of blockchain technology and cryptocurrencies. Abikure told New Telegraph:

“It is not a matter of whether the government likes it; it is about whether they need it. I am not sure the internet was liked when it first came. […] It is not a matter of whether they are going to embrace it; it is about when they are going to do so.”

Abikure observed that other countries such as Uganda and South Africa have already taken steps towards adopting blockchain technology while Kenya is pushing forward with a functioning blockchain taskforce.

“Nigeria is being left behind,” he noted.

The Blockchain as a Source of Foreign Direct Investments

Abikure also believes that blockchain technology could be a major source of Foreign Direct Investments (FDIs) in the next five to ten years. In addition, he is of the opinion that a lot of money is being made in cryptocurrencies on the continent with most of it leaving Africa’s economy.

On one of the benefits of blockchain technology, he said: “[The blockchain] is completely transparent and cannot be changed; it can be used to create a decentralised system of payment where the taxpayer had an unhindered access to the collector which is the government. It enhances revenue collection and removes the challenges of remittances.”

Blockchain technology can also improve the banking sector, the electoral process, the use of donations in charitable projects, and the supply chain, among many other use cases.

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